MAN warns Nigeria’s production environment is driving away long-term investors despite a 132% surge in total capital inflows…..
The Manufacturers Association of Nigeria (MAN) has raised fresh concerns over weakening investor confidence in Nigeria’s real sector, after new data showed foreign investment in manufacturing plunged by 54.11 per cent in the first nine months of 2025, even as overall capital importation into the country more than doubled.
Figures released by the National Bureau of Statistics (NBS) revealed that capital inflows into the production and manufacturing sector dropped sharply to $463.52 million between January and September 2025, down from $1.01 billion recorded in the same period of 2024.
The contraction stands in stark contrast to the broader picture. Total capital importation into Nigeria surged by 131.96 per cent to $16.78 billion in the nine-month period, compared to $7.23 billion a year earlier.
Manufacturing sidelined as financial sector dominates
A closer look at the data shows a clear pattern: investors are favouring short-term financial assets over long-term productive commitments.
In Q1 2025, manufacturing attracted $129.92 million, followed by $72.25 million in Q2 and $261.35 million in Q3 bringing the cumulative total to $463.52 million.
By comparison, the sector received $191.92 million in Q1 2024, a massive $624.71 million in Q2, and $189.22 million in Q3, totalling $1.01 billion.
In Q3 2025 alone, overall capital importation hit $6.01 billion — a 380.16 per cent jump from the $1.25 billion recorded in Q3 2024 and 17.46 per cent higher than Q2 2025.
However, portfolio investment accounted for $4.85 billion, representing 80.70 per cent of total inflows for the quarter. Foreign Direct Investment (FDI) contributed just $296.25 million, or 4.93 per cent.
Sectorally, banking led the inflow table with $3.14 billion in Q3 2025, followed by the financing sector at $1.86 billion. Production and manufacturing trailed far behind with $261.35 million, only 4.35 per cent of total inflows.
‘Investors are wary of long-term commitments’
MAN’s Director-General, Segun Ajayi-Kadir, said the numbers reflect deep-rooted concerns among foreign investors about Nigeria’s production environment.
“The Nigerian manufacturing ecosystem is not encouraging for investment due to persistent headwinds,” he said.
According to him, foreign investors are increasingly cautious about committing to long-term manufacturing projects because of high production costs, macroeconomic instability, infrastructure gaps, double-digit interest rates and limited market linkages.
He added that the sector’s sluggish growth, low capacity utilisation, weak export contribution and declining GDP share are clear indicators of eroding competitiveness.
Despite Nigeria’s large consumer market and abundant natural resources, Ajayi-Kadir argued that structural, policy and economic constraints continue to discourage expansion and fresh investment.
“Foreign investors prefer sectors that are less exposed to Nigeria’s operational risks,” he stressed.
He cited foreign exchange volatility, persistent inflation, rising input costs, unreliable electricity supply, poor transport infrastructure, inefficient ports, policy inconsistency, regulatory uncertainty and security challenges as major deterrents.
For manufacturers, the message is sobering: while capital is flowing into Nigeria at record levels, the country’s factories are being left behind and unless structural bottlenecks are addressed, long-term industrial growth may remain elusive.
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